DHAKA, Sept. 10 (Xinhua) -- The Bangladesh cabinet has approved the draft of the small and medium enterprise policy to boost the industry and increase its contribution to the GDP up to 32 percent by 2024 from the existing 25 percent.

The approval came from a meeting chaired by Prime Minister Sheikh Hasina at the Prime Minister's Office (PMO) Monday morning, national news agency BSS reported.

"The cabinet, in principle, approved the draft of The Small and Medium Enterprise (SME) Policy 2019, which is first of its kind, in line with The Industrial Policy 2016," Cabinet Secretary Mohammad Shafiul Alam told a news briefing.

"SMEs are now being run under a strategy of 2005 as there is no SME policy," Shafiul said.

The draft policy was formulated to achieve six targets ensuring access to finance, access to technology and innovation, access to market, access to education and training, access to business support services, and access to information for the SME entrepreneurs.

"The policy will benefit 78 lakh SMEs as the government wants to give them a strong footing as they are currently contributing 25 percent to the GDP while micro and cottage industries will also be treated as SMEs," he said.

The government, he said, has set a target to increase the SMEs' contribution to the GDP to 32 percent from the existing 25 percent.

"Under the policy, an SME Credit Guarantee Fund will be introduced to simplify the loan system for the entrepreneurs and no mortgage will be required for getting the loan," Shafiul said.

It also proposed a "Startup Fund" for attracting unemployed people to start their own business and providing forward and backward linkage support to give the industry a strong footing, he said, adding that the policy has attached priority to setting up friendly SMEs.

The policy has put emphasis on giving special attention to women entrepreneurs, offering them proper training and necessary loan to run their SMEs, he said.